The companies within this group are, Shatterprufe, PFG Building Glass, PG Glass and PG Autoglass. KDA have successfully carried out Performance Improvement Programmes at each of these companies over the last 10 years.
With the increasing competition in the glass market, from both building and automotive, KDA was recently employed again at PG, this time to look holistically across the entire group within South Africa, in order to analyse the different processes and systems being employed and to design an Implementation Programme that would allow the Group to reduce both structural overhead costs and procurement costs.
Firstly KDA analysed and identified the level of opportunity together with the detail of what needed to be done in order to access the benefits, whilst training an internal high-powered team to implement these recommendations. The second phase was the implementation itself, which was to be carried out by this internal team.
The Group organisational structure was re-designed at the highest levels both divisionally and functionally. All support services functions were included and following detailed analysis rationalisations were identified.
Procurement and logistics
This module was focussed on optimising both the quality and price of purchased goods and services. Detailed analysis was carried out to identify cross-divisional suppliers, commodities and services. New negotiations were instigated utilising the analysis and supplier rationalisation and differentiation to take place. Processes were stream-lined and 430,002 transactions were categorised and supplier records rationalised from 8,047 to 2,811. The procurement structure itself was consolidated and centralised where appropriate.
The definition of the most cost-effective distribution network, given the service constraints, also had to be completed in order to stream-line the cost of logistics. Within this the definition of the cross-divisional route networks had to be carried out to allow identification of potentially redundant nodes.
Measurement and processes
Cross-divisional information and data requirements and a suite of new key performance indicators were designed and installed in order to measure the effectiveness of business processes and to enhance accountability, performance and cost control.
Multi million Rand savings were identified during Phase I and agreed as real and achievable. At this point KDA handed over to the internal team and Phase 2 commenced. Significant savings have been implemented so far having an extremely beneficial impact on the Group’s bottom line at a time when a stronger Rand was damaging financial performance as export prices were increasing.